FSA and HSA Limits Rise 2027: New IRS Maximums for Health FSA, Dependent Care and HSA Contributions

The new FSA and HSA limits 2027 are official, and most workers can put more pre-tax money aside starting January 1. The IRS set the health FSA salary reduction cap at $3,500, up $100 from $3,400, in Revenue Procedure 2026-35, which employers and benefits advisers began circulating on November 5 and 6, according to M3 Insurance and EPIC Insurance Brokers. The HSA caps, set earlier in the year in Revenue Procedure 2026-24, rise to $4,500 for self-only coverage and $9,000 for family coverage, up from $4,400 and $8,750, according to Wex and OneDigital. The dependent care FSA stays at $7,500 because the amount is fixed in law and not adjusted for inflation. Open enrollment is running now, so you have a few weeks to choose your elections. We’ll be updating this article monthly.

Here is why it matters now. Most employers set 2027 FSA elections in the next few weeks, and many close enrollment before December 1, so the new numbers arrive just as workers decide how much to set aside. An HSA, by contrast, can be adjusted at any time. The jump is modest, but the combination is powerful: a family with a high deductible plan can now shelter $9,000 in an HSA plus $3,500 per working spouse in a health FSA, subject to some plan rules. One catch applies to people who want both. A general purpose health FSA can interfere with HSA eligibility, so check your plan documents. Below are every 2027 figure, the year over year changes, the rule changes from last year, a savings calculator and the dates to circle.

FSA and HSA Limits Rise 2027 Key Highlights

The FSA figures come from NueSynergy, M3 Insurance and EPIC, and the HSA figures come from Wex, OneDigital and Wagner Law Group. Each describes the same IRS guidance. Confirm the numbers on irs.gov before you publish them in an employer handout.

Latest News: What the IRS Announced for 2027

The IRS published the health FSA, commuter and related limits in Revenue Procedure 2026-35. EPIC lists the release date as November 5 in its quick facts and November 6 in its article metadata, and M3 says Thursday, November 5, so use November 5 as the date unless the IRS page says otherwise. The new limits apply to plan years beginning on or after January 1, 2027.

The per employee health FSA cap is applied per employer. EPIC explains that a plan may offer a carryover of up to $700 or a grace period of up to two and a half months, but not both. Employers may add their own money on top of your salary reduction if the plan qualifies as an excepted benefit, and the total benefit cannot exceed the greater of twice your salary reduction or your reduction plus $500.

Employers are not required to raise their caps. M3 notes that companies that want to match the new $3,500 limit should ask their administrator. That means your plan may still show $3,400, and you should read your own enrollment guide.

The HSA numbers were released earlier in Revenue Procedure 2026-24. Wagner Law Group reported the announcement in June, and OneDigital summarized it in July. That guidance also fixed the high deductible health plan thresholds and the excepted benefit HRA limit of $2,250.

Health FSA Limit for 2027: What You Can Contribute

The health FSA limit for 2027 is $3,500 per employee. A married couple can each contribute up to that amount if both work for different employers whose plans allow it, which makes a possible $7,000 for the household. The limit is not per family, as EPIC points out, but per person.

An FSA is a use it or lose it account in most cases, so the plan’s carryover or grace period rule matters. If your employer offers carryover, up to $700 can move into 2028 without counting against the new year’s limit. A plan with a grace period instead gives you until mid March to spend the old balance, and a plan can choose either option or neither.

Which expenses qualify? Typical examples include copays, deductibles, prescriptions, dental work, vision care and some over the counter items. Your plan administrator keeps the official list, and the IRS explains eligible medical expenses in Publication 502. A good habit is to estimate predictable costs, such as glasses, orthodontia and regular prescriptions, and add a small cushion for surprises. Do not elect the maximum if you cannot predict spending, because unspent money above the carryover is generally forfeited.

Dependent Care FSA Limit: Still $7,500

The dependent care FSA stays at $7,500 per household, or $3,750 if you are married and file separately. According to Catapult Benefits, the amount is set by statute, Public Law 119-21 section 70404, and is not adjusted for inflation. The same source warns that the higher limit applies only if your plan document allows it. Some plans still cap elections at $5,000, and employers must amend the document before open enrollment.

This account pays for care that lets you work, such as daycare, preschool, after school programs and summer day camp for children under 13. It generally does not cover overnight camps or tuition for kindergarten and above. Both spouses usually need earned income, and dependent care FSA money cannot be used for your own medical bills.

HSA Contribution Limit for 2027: $4,500 and $9,000

The HSA contribution limit is $4,500 for self-only coverage and $9,000 for family coverage in 2027. Savers age 55 or older can add a $1,000 catch-up contribution, making the totals $5,500 and $10,000, according to Wex. The catch-up is set by law and does not change with inflation.

You must be covered by a qualifying high deductible health plan to contribute. For 2027, the HDHP must have a deductible of at least $1,750 for self-only coverage or $3,500 for family coverage, and out-of-pocket costs capped at $8,700 or $17,400. These HDHP amounts come from Wagner Law Group and OneDigital.

Contributions from your employer count toward the limit. If you go over, the excess is taxable income and may trigger a 6 percent excise tax, Wex explains. Fix excess contributions by withdrawing them before your tax deadline. HSA money never expires, you own the account and you can invest it, which is why many planners treat it as a stealth retirement account.

New HSA Rules to Know in 2027

Several rule changes came from last year’s tax law, known as the One Big Beautiful Bill Act, and they now matter for 2027 planning.

Bronze and catastrophic plans. The IRS says these marketplace plans now qualify as HSA compatible, even if they do not meet the usual HDHP deductible and out-of-pocket tests, according to RSM’s summary of Notice 2026-5. They do not need to be bought through an exchange to qualify, and off exchange purchases can work with an individual coverage HRA.

Direct primary care. Starting January 1, 2026, a qualifying arrangement no longer disqualifies you from HSA participation. The fee cannot exceed $150 per month for an individual or $300 per month for family coverage, and the arrangement must provide only primary care for a fixed periodic fee. Catapult reports that Revenue Procedure 2026-24 keeps those caps for 2027.

Telehealth. First dollar telehealth coverage before the deductible is now permanent, according to the same notice. In person care, equipment and drugs still follow the normal deductible rules.

How the Numbers Compare to Last Year?

These percentages are calculated from the published figures. The increases are small but they add up across a household. A family that maxes an HSA at $9,000 and both spouses’ health FSAs at $3,500 sets aside $16,000 pre-tax, before dependent care.

Other 2027 Health Account Limits Worth Knowing

Two other limits matter for small employers. The excepted benefit HRA, which an employer can offer alongside group coverage, rises to $2,250 from $2,200. Catapult also lists qualified small employer HRA limits of $6,700 for self-only coverage and $13,550 for family coverage, though that is a single source, so check IRS guidance before quoting it.

The Affordable Care Act figures changed too. OneDigital reports that the 2027 out-of-pocket maximum for non-HSA marketplace plans rises to $12,000 for self-only and $24,000 for family, up from $10,600 and $21,200, and that the employer affordability percentage moves from 9.96 to 10.22 percent. These are single source figures. Check them against IRS and HealthCare.gov updates.

How to Enroll: Opening an HSA or Choosing a Health FSA

You do not apply to the IRS for either account, but you must make elections during your plan’s enrollment window.

1. Check which plan you have. For an HSA you need a qualifying HDHP. Your plan summary or insurer portal will say whether it is HSA eligible.
2. Choose your account. Employers with an HSA usually pick a bank or custodian. If yours does not, you can open one yourself at a bank, credit union or brokerage.
3. Pick a contribution amount. Use the limits above, and remember employer contributions count.
4. For a health FSA, set your annual election during open enrollment. Most elections cannot be changed mid year unless you have a qualifying life event, such as marriage, birth or a loss of coverage.
5. Confirm your payroll deduction on your first January paycheck and keep receipts for expenses.

Processing Time: When Contributions and Claims Move

There is no waiting period for the IRS to approve anything. What matters is your employer’s timeline. HSA contributions generally post each payday, and you can usually spend the balance as soon as it appears. A health FSA is different. Your full annual election is typically available on day one of the plan year, even though your paycheck deductions come in installments. Claims reimbursed from either account depend on your administrator, and debit cards often settle within days while manual claims can take a week or two. The dependent care FSA works differently, since you can generally only be reimbursed up to what you have contributed so far.

Payment Schedule: Key Dates for 2027 Planning

The April date is a common tax rule and is stated here from general knowledge, so confirm it with the IRS. The marketplace date is a typical deadline, and your state may differ.

2027 FSA and HSA Limits and Tax Savings Calculator

HSA vs FSA: Which Account Fits You?

If you have a qualifying HDHP, the HSA usually wins on flexibility because your balance can grow over time. If you have a traditional plan, the health FSA can still lower your tax bill for expenses you know are coming.

Mistakes to Avoid With Your 2027 Elections

Do not forget that the FSA is a use it or lose it account. Do not contribute to an HSA if you have disqualifying coverage, such as a general purpose health FSA, unless your plan is limited to dental and vision. Do not assume your employer adopted the higher caps, and do not count on a Medicare enrollee being able to keep contributing. Do not forget to keep receipts, since the IRS can ask you to prove that withdrawals were for qualified expenses. Finally, review your elections each year, because a plan that fit last January may not fit a new deductible, a new job or a growing family.

Official Resources for FSA and HSA Limits

FAQs About FSA and HSA Limits Rise 2027

Conclusion

The new FSA and HSA limits for 2027 are a small but useful bump. The health FSA moves to $3,500, the HSA climbs to $4,500 and $9,000, and the dependent care FSA holds at $7,500. Open enrollment is the moment to act, because FSA elections are generally locked in. Start with your plan documents, check whether your employer adopted the higher caps and match your contributions to realistic spending. If you have an HSA, remember the rules around catch-up contributions and excess deposits. We’ll be updating this guide as the IRS and employers publish more details.